Suppose you wanted to create a portfolio that consists of the corporate bond fund and the common stock fund. Compute the portfolio expected return and portfolio risk for each of the following situations:
a. $300 in the corporate bond fund and $700 in the common stock fund.
b. $500 in each fund.
c. $700 in the corporate bond fund and $300 in the common stock fund.
d. On the basis of the results of (a) through (c), which portfolio would you recommend? Explain.
For Information: Problem 5.16